Wecome finance shortfall insurance?

Manoona

Hiya,

Just a quick question really - I have a car on HP with Welcome Finance (Yes I know I didnt do my homework before hand and now have to deal with it! lol) My question is, now my circumstances have changed slightly I have agreed a lower payment to them I used to pay 211 each month and now I am currently paying 150 - Does this afffect my shortfall insurance that I tool out with them as it is added in with the HP agreement.

I only ask as I am sure I read on here a while ago that someone was refused a payout on their shortfall because they were not paying the full amounts each month and obviously I dont want this to happen - especially with the snow around at the mo, and if in fact they wont pay out then there really is no point in having it and so am I able to cancel it and therefore reduce the amount of finance agreement - all be it a very minor reduction!

Any advice appreciaited
Cheers

~Brock~

If the policy was added as a single premium and financed by the agreement then no, it will not be cancelled if you are in arrears with your installments, because the policy was bought and paid for at the outset, thus guaranteeing cover.

This is an often overlooked benefit of single premium insurance - you are guaranteed cover without running the risk of cancellation due to unpaid premiums and are also protected against mid term premium increases.

Tubbss

Hi,

If you need to claim on the shortfall it will NOT cover arrears on the account - if you are paying £150 per month against a contractual payment of £211 then every month you will increase arrears by £61 and this amount will not be covered. If you have any other arrears / missed payments wether agreed or not then in the even of a claim these would not be covered and this could leave you with a remaining balance that would need to be paid by you.

Manoona

Hi,

Cheers for that, I understand the actual arrears wouldnt be paid, i was more worried that they wouldnt pay out the shortfall because of the arrears! Not that im making a claim I was just checking through my policy details but it wasnt very clear!

Thanks

spacehopper1

The shortfall insurance will cover the original agreement amount only. So if you claimed on the shortfall and say the original agrement total payable was 10k you paid 4k and 6k was carried forward into the modified agreement that then that had a total payable of £12k you would only be covered for the £6k carried forward so you would still be left with a large balance outstanding that you would be liable for. The best thing would be to get a settlement figure from Welcome and try to raise the money to settle it off because if the worst happens you end up with no car, no insurance payout to put towards a new car and you are left with a large debt to add insult to injury.